A team from the European Commission, the International Monetary Fund and European Central Bank are en route to Dublin this morning to assess help for Ireland’s struggling banking sector and decide whether an EU loan is needed to shore up government finances, which were badly hit by efforts to rescue the country’s banks.

“This can be considered as an intensification of the preparations for a potential programme if requested by the Irish government and deemed necessary by the euro area member states,” the EU’s commissioner for economic and monetary affairs, Olli Rehn, said on Wednesday (17 November).

Irish Prime Minister Brian Cowen emphasised that the mission would look at what assistance Ireland might require, again rejecting suggestions that his government was discussing a bailout.

The EU’s finance ministers met in Brussels on Wednesday and in large part showed their support for an Irish EU-IMF loan to shore up the government’s finances, akin to the one Greece is currently receiving.

But they stressed that Ireland had not made a formal request for aid.

Ireland has already injected 60 billion euros to shore up the its banks, adding to a ballooning deficit in the country’s public finances.

Rehn said the joint EU-IMF team will be focusing on the banking sector but also on inspecting the country’s 15-billion-euro budget-cutting strategy, due to be presented next week.

Rehn said it was premature to speculate on the conditions that could be attached to an EU loan should Dublin apply for help, saying the EU was “still in technical talks with the Irish authorities”.

Irish Finance Minister Brian Lenihan dismissed suggestions that Ireland would be forced to raise its ultra-low 12.5% corporation tax rate in return for EU help. Higher-tax countries, including Britain and Germany, have long seen the Irish rate as a form of unfair competition.

“Of course our corporate tax rate is safe,” he said.

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